The next big thing?

Despite the hype, m-commerce offerings are scant

When the idea of mobile commerce first began to gel, everyone got excited. Here was a way to enable wireless commerce--from purchasing items from e-tailers to trading stocks--while you're on the go. All you needed was a wireless-application-protocol-enabled mobile device such as a cell phone.

So what's holding it back? "Service providers are offering what they can provide versus what users want," says Michael King, a senior analyst for Gartner Dataquest, a research firm based in Stamford, Connecticut.

Not to say that there aren't some offerings out there. When Sprint rolled out its wireless Web service in 1999, it promised an experience that would replace the desktop. "We've got services that are designed around a wire line network," King says. But, he explains, "The services need to span both environments, which means they need to be designed differently for use on the wireless Web."

"People expected the services to be much more in-depth," says Callie Nelsen, an analyst for IDC, a research firm based in Framingham, Massachusetts. Current services simply have not met consumer expectations.

IDC had predicted that by the end of last year, roughly 400,000 people would be using m-commerce applications, and by 2004 they predict 29 million subscribers will be using the application and spending $21 billion on everything from clothing to books to toys. Will m-commerce catch up?

"There [is a] continuing lack of real compelling services, personalization, and timeliness," says King. Nelsen agrees that what's available now just isn't enough to get consumers excited.

Another issue holding up the m-commerce rush is security. "End users have the idea that it's not secure," Nelsen says. King also points to security as a prime factor affecting the emerging market. "It's the perceived value of information versus the perceived risk," he says.

For sending a quick e-mail, there isn't much risk, but when you commit to sending your credit card number, you think twice. To make m-commerce more secure, the networks have to be improved, and device and end user authentication, such as a PIN number, are important, in case of device theft.

Even with the slow adoption rates, e-tailers aren't just waiting around for m-commerce to grow. Amazon.com is aligning itself as the m-commerce book site by signing deals with wireless providers such as Sprint PCS, Verizon, and Nextel. Meanwhile, the wireless providers are trying to build larger customer bases by establishing deals with companies like AOL, MSN, and Yahoo.

M-commerce isn't quite there yet, but if you're curious, there are providers ready to serve what's available. "If you want to play with it, go ahead, but the majority who try it will be disappointed," King says.